New Medicare Shared Savings program likely to create conflict for physicians: Impact on malpractice?

October 3, 2012

HealthcareThe Department of Health and Human Services (HHS) is moving ahead with a Medicare Shared Savings Program that is intended to change physician behavior.

Physicians are being placed in the position balancing off patient wishes and needs—on one side—against an opportunity to receive bonus payments for reducing services on the other side.

The result will be conflict for many physicians as they attempt to reconcile the additional patient services that might be considered—versus personal financial incentives for reducing care.

According to HHS, 27 health delivery organizations were selected for the Program performance period that began April 1, 2012, and 89 organizations for the period scheduled to begin July 1, 2012.

Applications for the next period were accepted until September 6, 2012, for performance starting January 1, 2013.

Thus, patient and physician experience with this Program is just beginning to develop. 

According to HHS, this Program is intended to result in “higher quality and lower total expenditures for individual Medicare beneficiaries and the Medicare program.”

The Program is open to Medicare Accountable Care Organizations (ACOs) that enter into cost-sharing agreements with HHS.

Physicians will be able to share in possible savings for care provided.

The ACOs may choose how to “distribute shared savings” and “allocate risk.”

The Program has encountered possible conflict with Medicare fraud and abuse regulations.

The response has been to develop waivers that will enable the Program to proceed.

It is not clear how the Shared Savings Program will affect patients and physicians, malpractice lawsuits, and malpractice insurance policies.

If HHS objectives are met, everyone will be mutually satisfied with these arrangements.

On the other hand, cases of intense conflict may result when a patient and physician do not agree, and the patient alleges that the Shared Savings Program is resulting in reduced access to care and malpractice.

How will such cases be accommodated as they happen?

And how will the availability and costs of malpractice insurance be affected?

It is clear that many health care organizations are willing to participate in the Shared Savings Program.

However, attorneys will need to be alert for the potential “darker side” of such arrangements.

            Attorneys Ferd and Cheryl Mitchell have written a recent book on implementation of the Affordable Care Act, listed as “Legal Practice Implications of the New U.S. National Health Care Plan” (July, 2012) on